FONTERRA has released an opening price of $6.60 per kilogram of milk solids for the 2019/20 season.
Rene Dedoncker, Fonterra Australia's managing director, said announcing the milk price in May would help farmers make decisions.
"As our industry and business evolve to deal with a smaller milk pool, we have a stronger focus on servicing local demand which brings greater opportunity for certainty on pricing," Mr Dedoncker said.
"The broader global supply and demand picture is positive, with demand expected to remain strong across key trading partners and a favourable exchange rate."
Mr Dedoncker said it was a competitive price for the company's farmers and it would allow Fonterra to maintain a sustainable model. Fonterra recently announced it would close the Dennington factory due to a smaller milk pool.
Have you signed up to The Standard's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in the south-west.